London market insurers outline Brexit priorities
Companies in the London insurance market have identified four detailed priorities from Brexit negotiations, according to the International Underwriting Association (IUA) with the aim of maintaining London’s position as the largest global centre for commercial and specialty risk.
Members of the association’s Legal and Regulatory Committee believe it is vital to maintain existing freedoms for insurance services, and any trade agreement between the UK and EU should first preserve passporting and branching arrangements and recognise the equivalence of regulatory regimes.
Secondly, no barriers should be created that impede the use of English law contracts and standard London Market contractual forms in cross-European business. It will be important to provide clarity on which law UK courts will apply to contracts and to eliminate any doubts about the validity of contracts written prior to Brexit.
Tax issues must also be addressed with an early indication of the future VAT regime for insurance companies operating in the UK, said the IUA. The UK and EU should agree that consistency, fairness and transparency should apply to any tax implications arising from Brexit.
Finally, customer concerns about future arrangements for providing cover mean that insurers will be seeking to establish branches or subsidiaries both in the UK and various other European jurisdictions. Regulators will need to prepare to deal with an unprecedented increase in licence applications. In order to minimise uncertainty, it would be desirable for the UK and EU to reach an understanding at an early stage about where their discussion should lead, the IUA paper said.